Maoist rebels in Nepal say they may reconsider their opposition to the monarchy if the king holds free elections for a constituent assembly.

Senior rebel leader Prachanda told the BBC that the verdict of free and fair elections would be acceptable even if it meant the retention of the monarchy.

Elections, he said, had to be supervised by foreign monitors.

The Maoists have been fighting for the abolition of the monarchy and a communist republic.

Some 12,000 people have died in Nepal's 10-year civil war.

The rebels and a coalition of seven opposition parties have recently agreed on a programme designed to end direct rule by King Gyanendra.

Rethink

The king seized power in February, accusing the country's politicians of being incapable of ending the rebels' long-running insurgency.

Talking to the BBC in his first ever radio interview, Mr Prachanda said the rebels would reconsider their opposition to the monarchy if King Gyanendra agreed to the election of a constituent assembly.

"If [the] monarchy comes with that kind of position [acceptance of constituent assembly] we can think about the new situation. But right now we feel that this is not the case in our country," he said.

In theory, Maoist leaders continue to insist that their aim is to turn Nepal into a republic.

"History has proved that in Nepalese conditions the monarchy is the main obstacle for the cause of democratic aspirations of the masses and for the cause of peace. Therefore we want to abolish the monarchy and have a republican state," Mr Prachanda said.

But the world "republic" does not feature even once in a major 12-point agreement that the rebels have reached with Nepal's opposition political parties.

Also, unlike in the past, Mr Prachanda has stopped using insulting language against the king.

Opposition political parties are also not demanding an end to the monarchy, but that its powers be limited once again.

The royal government has always opposed the idea of a constituent assembly.

However, Mr Prachanda's statement may give the government an opportunity to rethink their own position as well.

The monarchy in Nepal has lost much of its popularity after the king seized direct power this year.

But many still believe that it is saving Nepal from a complete collapse.